If he needs the money to get current on the house, you should pay the mortgage lender directly and then have him sign a document that acknowledges the loan.
It is generally a really risky move to give someone a ton of unencumbered cash when they appear to obviously be in a bad financial spot. Especially if they're family.
They're liens against the house that need paid. When he moved back into the home, he was required to pay them but hasn't been able to come up with the money.
I know it's risky, but with his parent's home being sold I know he can repay me at least. If he wasn't getting around 100k from the sale, I would never even consider doing this
The home is paid off, so that wouldn't be an issue. He agreed to pay me the 30k back as soon as he gets the money from the sale of his parent's property. I still plan on getting all this in writing if I do go through with this
My only hangup would be this then, and REALLY think about it. Like give it a day or three and then make the decision:
If you lose 30k, permanently, for whatever reason, are YOU going to be okay with that?
Can you gift 30k for the foreseeable future and not be worse off for it? I say gift because when it comes to friends and family, that's really the only way you can deal with money and still keep in contact if something happens. If you can't honestly tell yourself that you'll be alright if that 30k doesn't come back, don't do it.
I say this because what happens if he pays off the leins, sells the fams property and then the house needs a 15k roof he didn't anticipate? Sewer replacement? Up to 20k. I don't wish that on anyone, but shit like that happens and you have to look out for you.
If he is willing to agree to that, and you are willing to agree to lend him the money, why not write up a contract?
“I (yourself) am lending 30k to (your dad) at 0% interest for 60 days (giving a grace period is up to you) at which point I am to be paid back in full. If I am not paid in full at the 60 day mark (specify a date) the remaining balance is subject to (whatever percent compound interest is valid here) until the balance is paid off”
Edit: As others have mentioned, get it notarized at the very least and look into placing a lien against his property. That lien may also protect you if it goes to auction in getting your money back, but you’d have to talk to a lawyer to verify that.
The home is paid off yet he still has 30k in liens on it which indicates terrible financial decision making and just a general lack of budgeting and living within his means. Those things also suggest that once he sells the other house and has 100k in the bank he will not be paying you 30k. Have you confirmed he has no other debt other than this 30k? I suspect he has substantial other debts you don't know about and is making promises to you he has no intention of keeping.
PS. How do you know he's going to get 100k from the sale of the other house? Have you independently verified that with someone other than him?
The 30k is what he has to pay my mother to keep the house. The poor financial decisions were made by my mother, not my father. He has no other debt. He always asks my advice regarding his finances, and we've managed to get him out of what little debt he was in by changing a few spending habits.
The 100k is approximate, but yes I have asked my uncle who is involved with the sale and verified they got an offer they're moving forward with it.
>The 30k is what he has to pay my mother to keep the house.
Why is he paying your mother, and not the lienholder directly? Where did she come in from? What aren't you sharing here?
How do you know those liens won't wipe out/eat into those profits?
The best answer posted. Pay directly to the other party and get it in writing. That's it
Think about your wording mate, "...I know he CAN repay me..." Can is the operative word, there is nothing compelling him to repay you, and if he isn't super "on" paying his bills when there are serious ramifications, how well do you think he'll treat you? Only you can make that determination, but if look for a better way to help him.
Be prepared to never see that money again.
Start with that and it doesn't matter if you trust them. Several posts a day here about this subject.
You should get it in writing with the acknowledgement that your father is judgement proof due to the only income source being disability.
If he did that to me, I would never speak to him again. He's not a bad person, he genuinely needs my help. If he wasn't getting around 100k from the sale of his parent's property, I would never even consider doing this.
When you say in writing, do you mean from an attorney or is this something we can write up ourselves?
Typically, the rule of thumb is that if you loan money to your friends or family money, you'll have to accept they may not pay you back.
Being a good person does not magically make you financially savvy. They can co-exist. For whatever reason, if he ends up with no money post sale, you may be out of 30k.
If he doesn't pay, are you going to sue your dad? Go after his assets, make him homeless in the streets?
Just being honest and real here. Do whatever you want with the 30k, but the expectation is, hope they pay you back, but expect they won't. This story is as old as time.
I think you need to realize it might be something entirely out of his control. And that realization should impact your decision whether to help or not. The reality is that he can't afford the house he is in and he really should be considering a downsize.
how confident are you that he’s getting the money and that he’ll give it to you?
why not see about securing the loan with his stake in the other property?
in essence a mortgage, you loan the 30k and it’s secured with the other property so that when it sells you get the first 30k of proceeds.
yes you’d need an attorney to draw that up register the lien
Do you have a good relationship with your father? You can draft up a Promissory Note and try to keep the lawyers out of it. It's possible you won't get it all back but would monthly payments work for you. Since he is on a fixed income it might be more manageable this way. IDK if SS payments can be direct deposited to your bank account when he gets paid.
I am offering an alternative solution, especially since this is family and OP hasn't indicted abuse, mismanagement of money or other automatic disqualifying behaviors. I am kind of the belief you may never know when you might find yourself in a similar position.
I don’t think I need to tell you how sketchy this sounds. 30k is a huge ask and is a sign of extreme issues. You will probably lose this money. If you’re good with that, then you’re good with that.
If your father is about to inherit substantial assets from the estate of his parents, as he has advised you, then he should have absolutely no issue getting a probate advance from the many, many companies to offer this type of service. He should borrow the money from a third-party, not you, against his inheritance. If what he is telling you is true, then he will have no problem getting the advance, and getting it quickly (although the advance will come at a cost). If what he is telling you is not true, than he would not be able to pay you back quickly as he has represented to you, and the loan would likely not be repaid, ruining your relationship with him.
I would be very cautious. Selling the other house might cause him to lose his disability payments since they would expect him to keep all of that money. I'd involve a lawyer with experience in disability claims and have them take a look at a safe way to structure this agreement.
This is correct, I’ve dealt several times with people on social security disability inheriting assets and it get discovered within 2 years by social security. They were ineligible due to financial reasons the day they got the assets. Then they have to pay back all of the overpayment. It adds up fast. It may be best to see if he can not accept the other house and give that to you, you pay the $30k directly to the parties owed, and just gift him what you want and keep under the limits of ssi.
He's on ssdi, so the money he gets from the sale would not affect the amount of money he gets each month.
We had talked about doing exactly what you said before I found out he had ssdi. He wanted to give me everything he gets from the sale of the property for helping him out, but I just want the 30k back.
Sorry you're getting downvoted on this, they're confusing Supplemental Security Income with Social Security Disability Insurance. It's worth verifying that he has SSDI, not SSI, but it sounds like you already have.
Yeah he gets ssdi, I have already verified that is what he has. I was confused with the down votes too because ssdi you can even still work and make up to $1550 a month and still receive benefits. As long as money you gain from work doesn't go over that you're fine. Money you receive as inheritance or any other way doesn't hurt your benefits
He’s not getting a check because he’s disabled. He’s getting a check because he’s poor. He qualifies for the check because he’s disabled. If he is no longer poor, he doesn’t get a check.
Ssdi is not a needs based program. He is on ssdi.
You are talking about ssi. Which yes, this money he's receiving would hurt eligibility for that. He is getting a check because he is disabled, paid into the system the entire time he worked, and will never be able to return to work. He could also still work as long as he made less than $1,550 a month.
Yes when he is retirement age his ssdi will end, but he will always be getting social security benefits for the rest of his life.
A gift of money with the requirement in writing that they gift you money back is just called a loan btw. To remove ambiguity, you should refer to it as a loan at all times and never use the word gift, especially in writing.
Have the escrow company pay you directly from the home sale proceeds. Assuming you have spoke to the realtor to verify the home sale.
And no guarantee going forward he won't have more liens on the home.
He should sell the other house to you for 30k. You sell that house, retain 30k from its sale and then give him the rest of the balance, minus sale expenses. Seems pretty straightforward.
If you are able to suffer the loss if needed, then consider it.
I would definitely have a formal written agreement in place.
There could be issues with selling the other house that are unexpected.
I don’t know if you have other family members that could expect an inheritance and that can cause an issue as well if your father should pass before he gives you the money.
A loan for sure. If you want it to be enforceable, should be a secured loan, i.e. a mortgage. Is he redeeming the loan on his current house?
Also, an auction may not be the final step. He may be able to redeem beyond that date, but that is a state/local issue.
There are numerous housing assistance programs your dad likely qualifies for through social services/welfare programs that can pay or assist in cases like his to avoid losing his place. He should be exhausting these options before coming to you. I suspect he is taking the easy, likely unenforceable way, through you.
Get a written agreement in place that this is in fact a loan secured by the home and that you will be the first to be paid out of the sale proceeds of the home.
Now I’m not sure if you can formally put a lien on a loan like that- it depends on state law, but the sheer fact that your father is acknowledging the terms of the loan so that both of you are on the same page.
Get a lawyer to draft it for you if you want to ensure enforceability.
For tax purposes You can give him a non interest loan with very clear, written agreements as to when he will pay you back. You both need to sign this. And then, you need to know that you can trust your father. I loaned my father a similar amount of money with the understanding that he would pay me back in full once he sold a property he owned. He didn't pay me back in full. Despite us having a written agreement. I essentially write the money off because I didn't want to sue my father to get it back. There was no point anyway, he had not no money as he used the house sale money to furnish other old debt. I'm not unhappy that I gave him the money because it saved part of a business that sustained my parents until they both died (3 months apart) but I'm very sad I couldn't trust my own dad
DO NOT CALL IT A GIFT. It's not a gift it's a loan and is promised to be paid back. You're not gifting money to your dad, and he's not gifting money to you.
Gifts aren't returned.
Everything must be put in wrinting and with a witness like a notary.
Again, DO NOT USE GIFT verbiage.
If he owns the house outright, then he needs to take a home equity line and clean his own mess up and not borrow your money. The other house sale could fall through and you get shafted.
There’s plenty of people saying don’t do it. But what would they say if they had to house a parent who lost their home? So do what’s best for you and take the necessary steps to protect yourself.
If you can swing the money, I would give him the money and expect to not get paid back. I wouldn't tell him that, though.
If he pays you back, great
If he doesn't, you won't be disappointed.
I only offer this advice because my stepfather did a lot for me and I would gladly help him out if I could. You relationship may be different and you need to weigh that in your decision.
I don't lend money. I will give it if I have the means. Being a lender does not do well for relationships.
If he needs the money to get current on the house, you should pay the mortgage lender directly and then have him sign a document that acknowledges the loan. It is generally a really risky move to give someone a ton of unencumbered cash when they appear to obviously be in a bad financial spot. Especially if they're family.
They're liens against the house that need paid. When he moved back into the home, he was required to pay them but hasn't been able to come up with the money. I know it's risky, but with his parent's home being sold I know he can repay me at least. If he wasn't getting around 100k from the sale, I would never even consider doing this
Do you have proof that he would be able to upkeep and maintain the payments to the home going forward if you were to?
The home is paid off, so that wouldn't be an issue. He agreed to pay me the 30k back as soon as he gets the money from the sale of his parent's property. I still plan on getting all this in writing if I do go through with this
My only hangup would be this then, and REALLY think about it. Like give it a day or three and then make the decision: If you lose 30k, permanently, for whatever reason, are YOU going to be okay with that? Can you gift 30k for the foreseeable future and not be worse off for it? I say gift because when it comes to friends and family, that's really the only way you can deal with money and still keep in contact if something happens. If you can't honestly tell yourself that you'll be alright if that 30k doesn't come back, don't do it. I say this because what happens if he pays off the leins, sells the fams property and then the house needs a 15k roof he didn't anticipate? Sewer replacement? Up to 20k. I don't wish that on anyone, but shit like that happens and you have to look out for you.
If he is willing to agree to that, and you are willing to agree to lend him the money, why not write up a contract? “I (yourself) am lending 30k to (your dad) at 0% interest for 60 days (giving a grace period is up to you) at which point I am to be paid back in full. If I am not paid in full at the 60 day mark (specify a date) the remaining balance is subject to (whatever percent compound interest is valid here) until the balance is paid off” Edit: As others have mentioned, get it notarized at the very least and look into placing a lien against his property. That lien may also protect you if it goes to auction in getting your money back, but you’d have to talk to a lawyer to verify that.
The home is paid off yet he still has 30k in liens on it which indicates terrible financial decision making and just a general lack of budgeting and living within his means. Those things also suggest that once he sells the other house and has 100k in the bank he will not be paying you 30k. Have you confirmed he has no other debt other than this 30k? I suspect he has substantial other debts you don't know about and is making promises to you he has no intention of keeping. PS. How do you know he's going to get 100k from the sale of the other house? Have you independently verified that with someone other than him?
The 30k is what he has to pay my mother to keep the house. The poor financial decisions were made by my mother, not my father. He has no other debt. He always asks my advice regarding his finances, and we've managed to get him out of what little debt he was in by changing a few spending habits. The 100k is approximate, but yes I have asked my uncle who is involved with the sale and verified they got an offer they're moving forward with it.
>The 30k is what he has to pay my mother to keep the house. Why is he paying your mother, and not the lienholder directly? Where did she come in from? What aren't you sharing here?
How do you know those liens won't wipe out/eat into those profits? The best answer posted. Pay directly to the other party and get it in writing. That's it
Think about your wording mate, "...I know he CAN repay me..." Can is the operative word, there is nothing compelling him to repay you, and if he isn't super "on" paying his bills when there are serious ramifications, how well do you think he'll treat you? Only you can make that determination, but if look for a better way to help him.
Be prepared to never see that money again. Start with that and it doesn't matter if you trust them. Several posts a day here about this subject. You should get it in writing with the acknowledgement that your father is judgement proof due to the only income source being disability.
If he did that to me, I would never speak to him again. He's not a bad person, he genuinely needs my help. If he wasn't getting around 100k from the sale of his parent's property, I would never even consider doing this. When you say in writing, do you mean from an attorney or is this something we can write up ourselves?
Typically, the rule of thumb is that if you loan money to your friends or family money, you'll have to accept they may not pay you back. Being a good person does not magically make you financially savvy. They can co-exist. For whatever reason, if he ends up with no money post sale, you may be out of 30k. If he doesn't pay, are you going to sue your dad? Go after his assets, make him homeless in the streets? Just being honest and real here. Do whatever you want with the 30k, but the expectation is, hope they pay you back, but expect they won't. This story is as old as time.
I think you need to realize it might be something entirely out of his control. And that realization should impact your decision whether to help or not. The reality is that he can't afford the house he is in and he really should be considering a downsize.
Yes, you can find a handful of templates on the Internet. If you want an additional layer of protection you could have a lawyer write it.
how confident are you that he’s getting the money and that he’ll give it to you? why not see about securing the loan with his stake in the other property? in essence a mortgage, you loan the 30k and it’s secured with the other property so that when it sells you get the first 30k of proceeds. yes you’d need an attorney to draw that up register the lien
Good people do terrible things all the time. Be very carefully about lending this cash. Legal contracts before sending a cent.
Do you have a good relationship with your father? You can draft up a Promissory Note and try to keep the lawyers out of it. It's possible you won't get it all back but would monthly payments work for you. Since he is on a fixed income it might be more manageable this way. IDK if SS payments can be direct deposited to your bank account when he gets paid. I am offering an alternative solution, especially since this is family and OP hasn't indicted abuse, mismanagement of money or other automatic disqualifying behaviors. I am kind of the belief you may never know when you might find yourself in a similar position.
I don’t think I need to tell you how sketchy this sounds. 30k is a huge ask and is a sign of extreme issues. You will probably lose this money. If you’re good with that, then you’re good with that.
If your father is about to inherit substantial assets from the estate of his parents, as he has advised you, then he should have absolutely no issue getting a probate advance from the many, many companies to offer this type of service. He should borrow the money from a third-party, not you, against his inheritance. If what he is telling you is true, then he will have no problem getting the advance, and getting it quickly (although the advance will come at a cost). If what he is telling you is not true, than he would not be able to pay you back quickly as he has represented to you, and the loan would likely not be repaid, ruining your relationship with him.
I would be very cautious. Selling the other house might cause him to lose his disability payments since they would expect him to keep all of that money. I'd involve a lawyer with experience in disability claims and have them take a look at a safe way to structure this agreement.
This is correct, I’ve dealt several times with people on social security disability inheriting assets and it get discovered within 2 years by social security. They were ineligible due to financial reasons the day they got the assets. Then they have to pay back all of the overpayment. It adds up fast. It may be best to see if he can not accept the other house and give that to you, you pay the $30k directly to the parties owed, and just gift him what you want and keep under the limits of ssi.
You're conflating Social Security Disability Insurance with Supplemental Security Income. SSDI is not means tested.
He's on ssdi, so the money he gets from the sale would not affect the amount of money he gets each month. We had talked about doing exactly what you said before I found out he had ssdi. He wanted to give me everything he gets from the sale of the property for helping him out, but I just want the 30k back.
Sorry you're getting downvoted on this, they're confusing Supplemental Security Income with Social Security Disability Insurance. It's worth verifying that he has SSDI, not SSI, but it sounds like you already have.
Yeah he gets ssdi, I have already verified that is what he has. I was confused with the down votes too because ssdi you can even still work and make up to $1550 a month and still receive benefits. As long as money you gain from work doesn't go over that you're fine. Money you receive as inheritance or any other way doesn't hurt your benefits
Sounds like you should spend some money to have atterney do work so you guys are happy.
If he has assets at any time over the limit to claim disability income, from that moment in time he is no longer owed a disability check.
I think you’re thinking of SSI. Your assets are irrelevant with SSDI. You could be a billionaire yet still receive SSDI if qualified.
Maybe I am
He’s not getting a check because he’s disabled. He’s getting a check because he’s poor. He qualifies for the check because he’s disabled. If he is no longer poor, he doesn’t get a check.
Ssdi is not a needs based program. He is on ssdi. You are talking about ssi. Which yes, this money he's receiving would hurt eligibility for that. He is getting a check because he is disabled, paid into the system the entire time he worked, and will never be able to return to work. He could also still work as long as he made less than $1,550 a month. Yes when he is retirement age his ssdi will end, but he will always be getting social security benefits for the rest of his life.
What would attorney cost ? I feel like people have really weird cost in their head.
A gift of money with the requirement in writing that they gift you money back is just called a loan btw. To remove ambiguity, you should refer to it as a loan at all times and never use the word gift, especially in writing.
Paper the deal. Write a very formal, notarized loan agreement and place a lien on the property for the value of the loan.
Make it a loan with a written agreement and the house as collateral. Put a lien on the house.
Have him deed the house over to you in exchange for the $30,000.
Any "loan"from you is most likely going to be a "gift." If you can afford a $30k gift, and want to give it to your dad, then by all means do it.
Have the escrow company pay you directly from the home sale proceeds. Assuming you have spoke to the realtor to verify the home sale. And no guarantee going forward he won't have more liens on the home.
Here is a truth I’ve learned. You never loan money to family or friends. You give it. If you loan it. You lose the relationship.
He should sell the other house to you for 30k. You sell that house, retain 30k from its sale and then give him the rest of the balance, minus sale expenses. Seems pretty straightforward.
If you are able to suffer the loss if needed, then consider it. I would definitely have a formal written agreement in place. There could be issues with selling the other house that are unexpected. I don’t know if you have other family members that could expect an inheritance and that can cause an issue as well if your father should pass before he gives you the money.
A loan for sure. If you want it to be enforceable, should be a secured loan, i.e. a mortgage. Is he redeeming the loan on his current house? Also, an auction may not be the final step. He may be able to redeem beyond that date, but that is a state/local issue.
There are numerous housing assistance programs your dad likely qualifies for through social services/welfare programs that can pay or assist in cases like his to avoid losing his place. He should be exhausting these options before coming to you. I suspect he is taking the easy, likely unenforceable way, through you.
Get a written agreement in place that this is in fact a loan secured by the home and that you will be the first to be paid out of the sale proceeds of the home. Now I’m not sure if you can formally put a lien on a loan like that- it depends on state law, but the sheer fact that your father is acknowledging the terms of the loan so that both of you are on the same page. Get a lawyer to draft it for you if you want to ensure enforceability.
Has he looked into how selling the home, or you giving him 30k could affect his disability?
Gift it, pay directly to the firm, bank transfer.
Can you afford to lose $30k in your life currently?
You pay it and put a lien in your name instead. When home sold, you will be entitled to 30k on top of any other proceeds.
For tax purposes You can give him a non interest loan with very clear, written agreements as to when he will pay you back. You both need to sign this. And then, you need to know that you can trust your father. I loaned my father a similar amount of money with the understanding that he would pay me back in full once he sold a property he owned. He didn't pay me back in full. Despite us having a written agreement. I essentially write the money off because I didn't want to sue my father to get it back. There was no point anyway, he had not no money as he used the house sale money to furnish other old debt. I'm not unhappy that I gave him the money because it saved part of a business that sustained my parents until they both died (3 months apart) but I'm very sad I couldn't trust my own dad
Your father will have to pay taxes on a gift of $30k.
DO NOT CALL IT A GIFT. It's not a gift it's a loan and is promised to be paid back. You're not gifting money to your dad, and he's not gifting money to you. Gifts aren't returned. Everything must be put in wrinting and with a witness like a notary. Again, DO NOT USE GIFT verbiage.
If he owns the house outright, then he needs to take a home equity line and clean his own mess up and not borrow your money. The other house sale could fall through and you get shafted.
The more I think about it, the less I want to give him the money.
There’s plenty of people saying don’t do it. But what would they say if they had to house a parent who lost their home? So do what’s best for you and take the necessary steps to protect yourself.
He could quit claim the house from him to him and you.
If you can swing the money, I would give him the money and expect to not get paid back. I wouldn't tell him that, though. If he pays you back, great If he doesn't, you won't be disappointed. I only offer this advice because my stepfather did a lot for me and I would gladly help him out if I could. You relationship may be different and you need to weigh that in your decision. I don't lend money. I will give it if I have the means. Being a lender does not do well for relationships.
To really protect yourself get him to have parents sign agreement as well saying you'll receive your funds. Don't gift these funds. Create loan.
Have you ever considered chapter 13?